AmazonCom Inc

question 7

Multiple Choice

Amazon.com Inc.does not currently pay a dividend.Analysts expect Amazon to commence paying annual dividends in three years.The first dividend is expected to be $2 per share.Dividends are expected to grow from that point at an annual rate of 4% in perpetuity.Investors expect a 12% return from the stock.What should the price of the stock be today?

• A) $19.93
• B) $21.37
• C) $22.03
• D) $22.32
• E) $25.00

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Definitions:

Population Variances

The squared deviations of a population's values from the mean, indicating how widely the population data is spread out.

Pooled Proportion Estimate

A method to estimate the combined proportion of two or more groups by pooling their successes and trials.

Proportion of Successes

It is the fraction of successes in a series of Bernoulli trials, representing the number of successes divided by the total number of trials.

Sample Sizes

The number of individuals or observations included in a sample, crucial for determining the study's statistical power.